The role of knowledge management in offshore outsourced software development

ENGLISH ABSTRACT:In an effort to streamline operations and focus on what they regard as core activities, a growingnumber of organizations from both developed and developing countries are increasingly lookingto outsource their software development and maintenance activities to lower cost countries suchas India and China, this is evidenced by the phenomenal growth in India’s software industry andthe number of major overseas IT companies establishing subsidiaries and relocating theirResearch and Development operations to India’s high-tech cities such as Hyderabad, Chennaiand Pune. With the mere size of their populations standing at over a billion people each,supported by their governments, Indian and Chinese business have been able to leverage thispopulation advantage producing a large pool of software engineers, technical specialists andback office workers to cater for the talent demands of the world.While the actual software development process might be non-core to many organizations, ithowever yields software applications that drive critical business processes and embed valuableorganizational knowledge. The handing over of software development operations by anorganization to a third party poses a risk of creating a dependency and exposing vital businessknowledge to competition thereby compromising its competitive edge. Both the people thatparticipate in software development projects and the software products these people developpossess knowledge which need to be secured and leveraged to enable the continued success of anorganization. Securing these knowledge artefacts and the knowledge created by the softwaredevelopment lifecycle process cannot be left to chance, therefore the success of an organization’ssoftware development activities needs to be measured largely on its ability to secure knowledgeassets that derive from such process and the leveraging of such knowledge to driveorganizational strategy and yield new knowledge.This thesis is premised on the fact that knowledge is the one competitive advantage thatseparates successful nations from failed states and one dominant force that prevails across allsuccessful economies in the 21st century, hence the notion of a knowledge economy. The study seeks to understand the importance of the role played by knowledge in an outsourcedsoftware development engagement and how knowledge management affects the success of thisengagement. By exploring the business drivers that spur organizations to outsource their ITactivities, the software development lifecycle, the different outsource models available toorganizations and the inherent risks surrounding knowledge loss, the thesis seeks to gain anunderstanding and the criticality of managing knowledge within an outsourced softwaredevelopment context and the strategies that organizations can utilize to deliver on outsourcingpromises with minimal risk.